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It's no secret that I like to optimize my credit cards — after all, I currently have 10 cards that I use for all my spending. That may seem like a lot if you have four cards like the average American, but it pales in comparison to credit card aficionados who have 35.
Lately card issuers like American Express, Capital One and Chase have been releasing record-setting welcome bonus offers, which has me wanting to apply for several cards, but I won't.
My reason for not submitting applications isn't because juggling 10 cards is too hard — in fact, I've created some hacks to help me manage multiple cards. And it's not due to a dip in my credit score either; it's fortunately very good at 783 (even after taking out a recent car loan).
I'm not applying for credit cards right now since I plan to start the home-buying process next year. Too many hard inquiries can lower your credit score a couple of points each, which isn't ideal prior to taking out a mortgage.
A hard inquiry is when a lender pulls your credit report, and they count for 10% of your FICO credit score. Every time you get a hard inquiry your score can drop a few points.
Hard inquiries remain on your credit report for two years, but they become less influential over time. Lenders look at a wide range of factors, like your income and amount of debt, when determining your eligibility for new financial products, like a mortgage. Prospective home buyers should aim to have credit scores of 760 or greater to qualify for the best interest rates on mortgages.
I have two hard inquiries on my credit report — from my recent auto loan and from a credit card application before that. To make sure my mortgage application is as good as possible, I'm going to pass on signing up for new cards until I close on a house.
While I won't be applying for any new credit cards in the near future, here are three cards I would apply for today, if I wasn't planning to buy a house soon.
- Chase Sapphire Preferred® Card
- Chase Freedom Flex®
- Blue Cash Preferred® Card from American Express
Chase Sapphire Preferred Card
Why I want to apply: The Chase Sapphire Preferred card caught my attention when Chase announced its highest-ever welcome bonus: 100,000 bonus points after spending $4,000 on purchases in the first three months from account opening. This bonus is 40,000 points more than the typical 60,000 offer and can be worth up to $1,250.
This bonus offer outmatches the premium Chase Sapphire Reserve® (see rates and fees), which is particularly noteworthy since the Reserve's annual fee is over seven times more than Preferred ($795 vs. $95, respectively).
Chase Freedom Flex
The Chase Freedom Flex® is an excellent cash-back card for maximizing your spending in a variety of categories.
- Long intro APR for purchases and balance transfers
- Rewarding quarterly bonus categories
- No annual fee
- Bonus categories are capped each quarter
- Has a foreign transaction fee
Rewards
- 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%)
- 5% cash back on travel booked through Chase Travel℠
- 3% on drugstore purchases and on dining (including takeout and eligible delivery services)
- 1% cash back on all other purchases
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3%
In addition, you earn 5% cash back on travel booked through the Chase Travel℠, 3% cash back on dining at restaurants (including takeout and eligible delivery services) and at drug stores and 1% cash back on all other purchases. These competitive cash-back rates are even more enticing thanks to a two-tier welcome bonus, intro 0% APR period and no annual fee.
The welcome bonus provides you with the opportunity to earn $200 cash back after you spend $500 on purchases in your first three months from account opening.
Pair that with the 15-month 0% APR on new purchases, and your savings can add up (after 18.24% - 27.74% variable APR). While I'm in the clear to apply for this card despite already having the Freedom (Chase lets you have all three Freedom cards), I'm hoping this card stays competitive through 2021 so I can apply once I close on a home.
Blue Cash Preferred Card
The Blue Cash Preferred® Card from American Express is a low-fee card with generous cash-back rewards and useful ongoing benefits, such as a monthly Disney Bundle credit. (Enrollment required for select benefits mentioned)
- High cash-back earnings for U.S. supermarkets and streaming services
- Intro-APR offer for purchases and balance transfers
- No annual fee for the first year
- It's less rewarding after the first year because of the annual fee
- Bonus rewards for U.S. supermarkets are capped
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply and find out your welcome offer. As High As $300 cash back* after you spend $3,000 in purchases on your new Card within the first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply, and if approved: 1. Find out your offer amount 2. Accept the Card with your offer 3. Spend $3,000 in 6 months 4. Receive the cash back. *Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout.
- $0 intro annual fee for the first year, then $95.
- Enjoy 0% intro APR on purchases and balance transfers for 12 months from the date of account opening. After that, your APR will be a variable APR of 19.49%-28.49%.
- Plan It®: Buy now, pay later with Plan It. Split purchases of $100 or more into equal monthly installments with a fixed fee so you don't have the pressure of paying all at once. Simply select the purchase in your online account or the American Express® App to see your plan options. Plus, you'll still earn rewards on purchases the way you usually do.
- Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at eligible U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) purchases and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout.
- Get up to a $10 monthly statement credit after using your enrolled Blue Cash Preferred® Card for a subscription purchase, including a bundle subscription purchase, at DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites. Subject to auto-renewal.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7% of each transaction after conversion to US dollars
Why I want to apply: The Blue Cash Preferred® Card from American Express gets an honorable mention since I already have this card and there's no way I could reapply right now.
New card members can benefit from as high as $300 cash back after spending $3,000 in purchases on your new Card in the first 6 months. Apply to find out your offer. If approved, you'll: 1. Find out your offer amount, 2. Accept the Card with your offer, 3. Spend $3,000 on purchases in your first 6 months 4. Receive the cash back. Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout. Welcome offers vary and you may not be eligible for an offer.
I'm grateful to have the Blue Cash Preferred Card at all since it's one of my most used cards. The card's industry-leading 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%) and 6% cash back on select U.S. streaming subscriptions have really come in handy amid the coronavirus.
And the intro 0% APR for the first 12 months on purchases from the date of account opening was helpful when I financed education courses (19.49% - 28.49% Variable APR). See rates and fees.
Learn more about how to maximize cash back on groceries and streaming services with the Blue Cash Preferred Card from American Express review.
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For rates and fees of the Blue Cash Preferred® Card from American Express, click here.
